AGL 033: Dealing With Vendors

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June 1, 2018
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AGL 033: Dealing With Vendors

Being an IT leader you get lots of opportunities to work with vendors.  Sometimes you welcome the calls, most of the times you don’t.  This episode I’ll go over some tips to help you work with vendors and make the best choice when deciding which vendor go with.  Vendor management is an important aspect of leading a technology team.

Vendors at conferences or trade shows

They usually are giving way gifts in exchange for a scan of your badge. Remember nothing is ever free.  If they scan your badge, you can bet they will email you and most likely call you.  Think about the value of that fidget spinner vs your time when you go to get your badge scanned.  My rule is, if you’re not at least somewhat interested in the product, don’t even approach the table.  The swag may look enticing, but you’ll just be wasting your time and the vendor’s time.   Stay away unless its legitimately a product you’re interested in.

Cold call vendors

What to do when vendors cold call you?  That’s tough, I usually don’t answer the phone if I don’t know who is calling me, but every now and again one gets through.  For starters, don’t be rude, but also don’t be too open either.  Be brief and have them get to the point. If its a service or product that you 100% know you aren’t interested in and will not be interested in anytime soon, then politely say “no thank you, we’re not interested, please remove me from you call list.”  Now, if they don’t take no for an answer, I usually say it again, and then say “goodbye” and hang up.  Try to always be as nice as possible, but don’t continue a conversation that’s going no where.

If you might be interested in the product or service, but not right now, tell them.  Say, “hey, I can’t talk now, and I’m not ready to move on anything right now, but feel free to call me back in XXX months and maybe things will be better for us to talk.”  I usually go with 4 months as a standard.  This gets you off the phone, and doesn’t burn any bridges incase this is a service or product you might be interested in in the future.

If you are interested in the product and have time to take the call, then do so.  Talk it out, ask questions, but never commit to anything more than another call. Schedule the next call on your terms, and ask for information you can read or research prior to that next call.  I usually don’t ask for references at this point, I wait until its time for a quote or SOW before I ask for references.  Its best not to get ahead of yourself.  Before the next call, be sure you have researched the company, product/service and checked for reviews and complaints.

When you call vendors

If you cold call a vendor, the vendor should feel like they’ve won the lottery.  But honestly, they rarely act that way. Be mindful of their time.  Don’t expect to get all of the information you’re looking for on that call.  The initial call is to make a request, and expect to get the information on a followup call/email/meeting, etc.  If you’re looking for a product such as a software suite or cloud solution, ask to schedule a demo.  Feel free to ask about pricing, but understand that they are only giving you their first offer at this point.  Discounts could be in the works when you get to the negotiation stages. Don’t show your hand too much on these calls, I never tell what my max budget is or even what range I’m looking to spend until I’ve seen a demo.

Be sure you’ve done some research prior to calling, don’t expect to get 100% of the info on the call.  Its a better use of your time and the vendors if you’ve read about them, written down some questions and have a couple of dates/times in mind for follow up meetings and calls. Do your homework before sending that email or picking up the phone. It will save an enormous about of time.

Deciding between vendors

This is the point where you should probably make a note to listen to the “Art of Negotiation” show once you’ve finished this episode. Below are a few things you need to do before deciding between vendors:

  1. Ask for and check references – always ask for a few references, either companies in your industry or in your geographic region that are willing to share their experience.  Call those companies and ask about their experience.  Ask about the migration process (if there is one), how support has been and what they would do differently if they were deciding on a solution. If a company sends you 3 references, call them all.
  2. Compare the costs and benefits – I usually try to make a list of total costs for each vendor I’m deciding between.  Cost as if the price on the invoice or SOW+ the cost of my team’s time and any recurring or ongoing support/maintenance costs.  Also look at how each vendor stacks up against your requirements, your nice to haves, and your wow that was cool lists.  Try your best to compare apples to apples and steak to steak.
  3. Don’t accept gifts from any potential vendor – I have a hard rule on this.  I don’t accept gifts from any potential vendor.  If one offers, I tell them I don’t accept them.  If they ship me something anyway, I either send it back or dispose of it (depending on what it is). Accepting gifts can change your way of thinking on a sub-conscience level.  I don’t even allow vendors to take me to lunch.  If we are meeting for lunch, I buy or we go dutch.  This way there is no way for the sub-conscience mind to make me feel like I owe them anything.  I don’t want my judgement to be clouded. For this reason, I don’t even accept gifts from vendors that I’ve had long standing relationships with.  I don’t want golf tickets, baseball or NFL tickets from a vendor.  I’ve turned them all down and will continue to. If I need to switch vendors or look for another one, I will and I don’t want the gifts they gave me to cloud my judgement.
  4. Always negotiate – Be open and honest about other vendors being involved in the process.  Let them know that you are deciding between 2.  Honestly and openly discuss prices you are getting, but never say who you are getting those prices from.  Many vendors will ask, “what other companies/products are you looking at?”  Don’t tell them. Just tell them the features you’re getting and the price you’ve been quoted and see if they can beat it.  Play the game some and get the best deal you can.  But always ask for a better price.  Sometimes just asking will get you huge discounts.  Once I sent emails to all of the software vendors that I had maintenance agreements with stating that I was happy with their software, and we were long time users/customers and rarely called support.  Could we get a discount on our maintenance going forward for being such great customers.  Almost half gave me a 10% discount just for sending that email.  One company we were paying 18% in annual maintenance and they reduced it to 10%.  A savings of nearly $10,000.  That’s a great return on a single email.  Be sure to listen to the “art of negotiation” episode for more tips.
  5. Don’t get locked in – Try not to get locked into a long term agreement if you can avoid it.  Try to have an “out” in your contract.  For any agreements that have to be longer than a year (for new vendors) I ask for them to include a clause in the contract that states if we’re unhappy in the first 3 months we can cancel with no penalty.  Almost everyone will put that in without pushing back.  Its a good way to protect your investment.
  6. Avoid buyers remorse – Once you’ve picked a product, and signed the MSA or SOW, don’t continue to look.  Don’t revisit competitors or and stop shopping around.  The decision has been made, don’t look again unless this product/service isn’t meeting your needs or its time for renewal.
  7. Maintain the relationship – Try to stay in touch with your sales rep or sales engineer after the sale.  Don’t discard them once its over.  Continue contact, build a relationship so that they are there for you when you need them…. and be there for them too.  Offer to be a reference if you love the product.  They will appreciate that, and sometimes give you a discount on renewals or professional services or toss free or discounted training your way.  Be the kind of customer that you would want them to be for you too.
  8. Don’t forget that a person is on the other end of the transaction – many times we forget that another person on is on the other end.  Business to Business isn’t a company to a company.  Its a person within a company to a person within another company.  There is always another person on the other end.  You don’t know what they are going through or what challenges they may have in their life.  Treat them with respect and hold them to high standards. They will appreciate that.  Don’t be rude and develop a bad reputation. You only get 1 reputation.

I hope you enjoyed this episode and if you have any questions feel free to hit me up on twitter @johnrouda or using Speak Pipe (the “leave a voicemail” link on the side).  I’m open to taking any questions on leadership or management.  I’ll either email you back a response or answer your question on an upcoming podcast.

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